"Due to the huge gap in management philosophy between the two parties as well as the culture shock, this split-up of joint ventures could have been forecast," says Wang Guojun, an insurance professor at Beijing's University of International Business and Economics (UIBE).
Wang cites the high salaries of the foreign management as an example. In a joint-venture insurance company, the foreigners are paid a salary at least the same as they made in their own country.
This is jarring for the Chinese partners, especially since a newly established life insurer needs at least seven or eight years to reach the break-even point.
According to Liu Liyi, who used to be the chief representative of Aon Group Beijing Office, good cooperation between the top management of the two parties is the precondition for the joint venture's success.
An exception to the seven or eight year rule is Shanghai-based Aon-COFCO, a 50:50 joint venture between the world's second largest insurance broker Aon Group and China National Cereals, Oils & Foodstuffs Import & Export Corp (COFCO), which started marking profits after a mere 18 months.
"Their cooperation will be smoother if the foreign party can have more leeway in management," says Liu.
Editor:Du Xiaodan